Finlands climate and soils make growing crops a particular challenge. The country lies between 60 and 70 north latitude - as far north as Alaska - and has severe winters and relatively short growing seasons that are sometimes interrupted by frosts. However, because the Gulf Stream and the North Atlantic Drift Current moderate the climate, and because of the relatively low elevation of the land area, Finland contains half of the world's arable land north of 60° north latitude.
Annual precipitation is usually sufficient, but it occurs almost exclusively during the winter months, making summer droughts a constant threat. In response to the climate, farmers have relied on quick-ripening and frost-resistant varieties of crops, and they have cultivated south-facing slopes as well as richer bottomlands to ensure production even in years with summer frosts. Most farmland had originally been either forest or swamp, and the soil had usually required treatment with lime and years of cultivation to neutralize excess acid and to develop fertility. Irrigation was generally not necessary, but drainage systems were often needed to remove excess water.
Until the late nineteenth century, Finland's isolation required that most farmers concentrate on producing grains to meet the country's basic food needs. In the fall, farmers planted rye; in the spring, southern and central farmers started oats, while northern farmers seeded barley. Farms also grew small quantities of potatoes, other root crops, and legumes. So far, the total area under cultivation was still small. Cattle grazed in the summer and consumed hay in the winter. Essentially self-sufficient, Finland engaged in very limited agricultural business.
After the war, the first challenge was to relocate displaced farmers. Most immigrant farmers were given farms that included some buildings and land that had already been in production, but some had to make do with "cold farms," that is, land not in production that usually had to be cleared or drained before crops could be sown. The government sponsored large-scale clearing and draining operations that expanded the area suitable for farming. As a result of the immigration and land-clearing programs, the area under cultivation expanded by about 450,000 hectares, reaching about 2.4 million hectares by the early 1960s.
Finland thus came to farm more land than ever before, an unusual development in a country that was simultaneously experiencing fast industrial growth. During this period of expansion, farmers introduced modern production practices. The extensive use of modern inputs-chemical fertilizers and insecticides, agricultural machinery, and improved seed varieties-sharply improved crop yields.
FORESTRY
Finland's wet climate and rocky soils are ideal for forests. Tree stands do well throughout the country, except in some areas north of the Arctic Circle. In 1980 the forested area totaled about 19.8 million hectares, providing 4 hectares of forest per capita-far above the European average of about 0.5 hectares. The part of forest land varied significantly from region to region. In the central lake plateau and in the eastern and northern provinces, forests covered up to 80 percent of the land region, but in areas with better conditions for agriculture, particularly in the southwest, forests accounted for only 50 to 60 percent of the territory. The main commercial tree species-pine, spruce, and birch-supplied raw material to the sawmill, pulp, and paper industries. The forests also produced considerable aspen and elder crops.
Forestry and farming were closely linked. During the twentieth century, government land redistribution programmed had made forest ownership widespread, allotting forestland to most farms. In the 1980s, private farmers controlled 35 percent of the country's forests; other persons held 27 %; the government, 24 %; private corporations 9 %; and municipalities and other public bodies 5 %. The forestlands owned by farmers and by other people-some 350,000 plots-were the best, producing 75 to 80 percent of the wood consumed by industry; the state owned much of the inferior land, particularly that in the north.
INDUSTRY
From the 1990s, Finnish industry, which for centuries had relied on the country's vast forests, became dominated by to a larger amount by electronics and services, as globalization lead to a decline of more established industries. Outsourcing resulted in more manufacturing being transferred in a foreign country, with Finnish-based industry focusing to a greater amount on R&D and hi-tech electronics.
ELECTRONICS
The Finnish electronics and electro-techniques industry relies on heavy investment in R&D, and has been accelerated by the liberalization of international markets. Electrical engineering started in the late 19th century with generators and electric motors built by Gottfried Stromberg, now part of the ABB Group. Other Finnish companies - such as Instru, Vaisala and Neles (now part of Metso) - have succeeded in areas such as industrial automation, medical and meteorological technology. Nokia was once a world leader in mobile telecommunications.
METALS, ENGINEERING AND MANUFACTURING
Finland has a plenty of natural resources, but many large mines have closed down, and most raw materials are now imported. For this reason, companies now are likely to focus on high added-value processing of metals. The exports include the production steel, copper, chromium, zinc and nickel, and finished products such as steel roofing and shield, welded steel pipes, copper pipe and coated sheets. Outokumpu is known for developing the flash smelting process for copper production and stainless steel.
With regard to vehicles, the Finnish motor industry consists mostly of manufacturers of tractors (Valtra, formerly Valmet tractor), forest machines (f.ex. Ponsse), military vehicles (Sisu, Patria), trucks (Sisu Auto), buses and Valmet Automotive, a contract manufacturer, whose factory in Uusikaupunki produces Fisker electric cars. Shipbuilding is an important industry: the world's largest cruise ships are built in Finland; also, the Finnish company Wärtsilä produces the world's largest diesel engines. In addition, Finland also produces train rolling stock.
The manufacturing industry is a significant employer of about 400,000 people.
CHEMICAL INDUSTRY
The chemical industry is one of the Finland's largest industrial sectors with its roots in tar making in the 17th century. It produces an enormous range of products for the use of other industrial sectors, especially for forestry and agriculture. In addition, its produces plastics, chemicals, paints, oil products, pharmaceuticals, environmental products, biotech products and petrochemicals. Biotechnology is regarded as one of the most promising high-tech sectors in Finland and it is growing rapidly.
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PULP AND PAPER INDUSTRY
A freight train departing from a pulp mill in Äänekoski
Forest products have been the major export industry in the past, but diversification and growth of the economy has reduced its share. In the 1970s, the pulp and paper industry accounted for half of Finnish exports. Although this share has shrank, pulp and paper is still a major industry with 52 sites across the country. Furthermore, several of large international corporations in this business are based in Finland. Stora Enso and UPM were placed #1 and #3 by output in the world, both producing more than ten million tons. M-real and Myllykoski also appear on the top 100 list.
ENERGY INDUSTRY
Finland's energy supply is divided as follows: nuclear power - 26%, net imports - 20%, hydroelectric power - 16%, combined production district heat - 18%, combined production industry - 13%, condensing power - 6%. One half of all the energy consumed in Finland goes to industry, one fifth to heating buildings and one fifth to transport. Lacking indigenous fossil fuel resources, Finland has been an energy importer. This might change in the future since Finland is currently building its fifth and approved the building permits for its sixth and seventh reactors. There is some uranium resources in Finland, but to date no commercially viable deposits have been identified for exclusive mining of uranium. However, permits have been granted to Talvivaara to produce uranium from the tailings of their nickel-cobalt mine.
COMPANIES
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Aleksanterinkatu, a commercial street in Helsinki
Notable companies in Finland include Nokia, the former market leader in mobile telephony; Stora Enso, the largest paper manufacturer in the world; Neste Oil, an oil refining and marketing company; UPM-Kymmene, the third largest paper manufacturer in the world; Aker Finn yards, the manufacturer of the world's largest cruise ships (such as Royal Caribbean's Freedom of the Seas); Rovio Mobile, video game developer most notable for creating Angry Birds; KONE, a manufacturer of elevators and escalators; Wärtsilä, a producer of power plants and ship engines; and Finnair, the largest Helsinki-Vantaa based international airline.[28] Finland has sophisticated financial markets comparable to UK in efficiency. Though foreign investment is as not high as some other European countries, the largest foreign-headquartered companies included names such as ABB, Tellabs, Carlsberg, and Siemens.
Around 70-80% of the equity quoted on the Helsinki Stock Exchange is owned by foreign-registered entities. The larger companies get most of their revenue from abroad, and the majority of their employees work outside the country. Cross-shareholding has been abolished and there is a trend towards an Anglo-Saxon style of corporate governance. However, only around 15% of residents had invested in stock market, compared to 20% in France, and 50% in the US.
Between 2000-2003, early stage venture capital investments relative to GDP were 8.5 percent against 4 percent in the EU and 11.5 in the US. Later stage investments fell to the EU median. Invest in Finland and other programs attempt to attract investment. In 2000 FDI from Finland to overseas was 20 billion euro and from overseas to Finland 7 billion euro. Acquisitions and mergers have internationalized business in Finland.
Although some privatization has been gradually done, there are still several state-owned companies of importance. The government keeps them as strategic assets or because they are natural monopoly. These include e.g. Neste Oil, VR Group (rail), Finnair, VTT (research) and Itella (mail). Depending on the strategic importance, the government may hold either 100%, 51% or less than 50% stock. Most of these have been transformed into regular limited companies, but some are quasi-governmental (liikelaitos), with debt backed by the state, as in the case of VTT.
